The crypto market remained sluggish and weak on Wednesday as bitcoin and ether (ETH) fell less than 0.4% since midnight UTC and the CoinDesk 20 Index (CD20) lost 0.9%, with 18 of its constituents declining.
The lack of a meaningful bounce will be the largest concern, especially as U.S. equity futures began to recover from Tuesday’s tech selloff.
A portion of the altcoin market outperformed its peers, with jupiter (JUP) and monero (XMR) posting gains of between 2% and 4% to suggest investor appetite is still alive despite bearish market conditions.
Bitcoin now needs to avoid slipping back below the psychological level of support at $60,000, which would trigger a return to a trading range not seen since late 2024 with $52,000 emerging as a key level to the downside.
Derivatives positioning
- Trading has slowed in the derivatives market, with volume down 27% to $141 billion int the past 24 hours, while open interest has increased by 2% to $106 billion. Liquidations tallied $158 million, the lowest in two weeks.
- BTC futures open interest (OI) is holding steady at around 730K BTC for the eighth straight day, signaling consolidation at current levels.
- ETH futures are showing renewed action. OI rose to 14.3 million ETH, the most in two weeks and up from a recent low of 13.74 million.
- The increase occurred as the spot price fell from roughly $1,780 to $1,650 over the past two days, a combination that typically indicates traders shorting into the rally. While funding rates hold slightly positive, showing some demand for bull exposure, 24-hour cumulative volume delta (CVD) is negative, a sign that bears are leading price action through market orders rather than passive limit orders.
- SOL futures are busier than ever, with OI at a lifetime high of 77.68 million tokens. But both funding rates and 24-hour OI-adjusted CVD are negative, meaning the action is being driven by fresh shorts, or bearish bets, on the token.
- In contrast, ZEC’s market is cooling fast, with OI retreating to 2 million tokens from near 2.55 million tokens last month.
- Broadly speaking, bears appear to be leading price action in most of the top 25 tokens, as is evident from negative OI-adjusted CVDs for the second straight day.
- Bitcoin’s 30-day implied volatility index (BVIV) has cooled to 43% from nearly 48% on Tuesday. Ether’s volatility index displays a similar pattern.
- On Deribit, the one-week skew widened to 10.9 vol points in favor of puts from roughly 7 points a day ago, a clear sign of intensifying downside concerns. The one-month skew also expanded.
- Block flows on Paradigm featured a straddle strategy involving call and put options at the $62,000 strike, both expiring July 3. A straddle buyer bets on elevated volatility.
Token talk
- While monero and jupiter performed well as Wednesday dawned, the same cannot be said for the likes of ethena (ENA), pump (PUMP) and stellar (XLM), all of which tumbled between 2.2% and 3.5% since midnight UTC.
- Ethena has now lost more than 90% of its value since touching a record high of $0.87 last September. The yield-generating DeFi platform is suffering from a strategy that depends on bullish market conditions, including positive funding rates.
- Similar drawdowns have been seen across veteran tokens such as and , which failed to reach their respective 2021 heights in the recent bull market, effectively trading in a macro downtrend since then.
- The U.S. Dollar Index (DXY) continued to set new ground on Wednesday and is now challenging its May 2025 high. A strengthening dollar is typically seen as a negative for risk assets, including altcoins, because it suggests investors feel safer in cash.